We have are now in the second year of a project that involves applying structural genomics approaches to the systematic study of signal transducing domains. This approach produced two major highlights over the past year, as well as many proteins and crystals in the pipeline. The inositol polyphosphate 5-phosphatase protein family is central to the regulation of a variety of intracellular processes ranging from membrane trafficking to Ca2+ signaling, and defects in this activity result in the human disease Lowe Syndrome. The crystal structure of a novel inositol polyphosphate 5-phosphatase, SPsynaptojanin, has been determined alone and as a product complex with Ca2+ and inositol (1,4)-bisphosphate at 2.0 and 1.8 A resolution, respectively. The enzyme has a bilobed fold and an active site His and Asp pair resembling those of several Mg2+-dependent nucleases, with additional loops that mediate specific inositol polyphosphate and non-specific membrane contacts. The 4-phosphate of inositol (1,4)-bisphosphate binds 4.6 A from the reactive site identified in APE1, explaining the dephosphorylation site selectivity of the 5-phosphatases. Based on the structure, a series of mutants were constructed and analyzed. They exhibit altered substrate specificity providing general determinants for substrate recognition. Trafficking of protein cargo within the cell is a central area of cell biology. Two types of motifs have been identified as endocytic signals in the endosomal/lysosomal pathways: tyrosine-based and dileucine-based. Until now, only the structural basis for recognition of the tyrosine-based signals was known. The mechanism of recognition of the leucine-based class was not understood until very recently. Four reports in 2001 revealed a new class of endocytic adaptor proteins, the GGAs, use their VHS domains to bind to a subset of dileucine-based signals that also contain an acidic cluster. This finding was of great interest generally, but of special relevance to our research program since we determined one of the first VHS structures in 2000 in advance of any knowledge of the biochemical function of this domain. We have now determined high resolution structures of the GGA3 VHS domain bound to two different acidic-cluster-dileucine signal peptides, from the CI and CD mannose 6-phosphate receptors. The signals bind in an extended conformation to helices 6 and 8 of the VHS domain. The structure highlights an Asp separated by two residues from a dileucine sequence as critical recognition elements. The side-chains of the Asp-X-X-Leu-Leu sequence interact with subsites consisting of an electropositive and two shallow hydrophobic pockets, respectively. Recognition occurs by a series of interactions that taken individually are relatively weak. It is the rigid spatial alignment of the three binding subsites that leads to high specificity.